Market Update: The Downward Drill Continues

The domestic market faced yet another day of fall during the day as we saw tremendous selling on the second consecutive day. The major stocks lead the way which kept the Sensex and the NSE well in red. The BSE Sensex closed down by a strong 2% (365 points) while the day trade for Nifty ended by 113 point down from yesterday’s close which is also a good 2% fall.

The Mid Caps and the Small Caps also followed the lead and closed down by 2% again. The major non performing sectors reporting losses were the IT firms, banks and the metal stocks.

The downtrend has been passed on by the negative sentiments hovering in the Asian and the European markets. The dollar is also going strong against the rupee and as per the last update seen, the forex rates stood at Rs 47.16 to USD.

The top losers for the day had been the engineering stocks giving cue to others. These included Voltas, Blue Star and L&T. Owing to the short summer and relatively cooler monsoons, the domestic market leader of air conditioners is not doing well and Voltas has huge built up of inventory and seasonal change in the demand situation.

In the auto segment also, the lull continued and stocks like Tata Motors, Ashok Leyland and Maruti ended on a weak note. Rising prices of fuel, interest rates and cost of raw material have brought down margins for the auto sector and thereby had a strong impact in their stock prices.

‘Bell the Bull’ says that weak fundamentals have contributed to the recent bearish trend of the Sensex and this is not a passing phase because such fundamental changes need time to happen.